Blockchain News Issue.10

I. Commentary of the Week

Xinhua Net: The blockchain trend has cooled down significantly, yet the advantages of commercial implementation show that big companies are still entering the market.

August 2nd: With the collapse of various cryptocurrencies, the blockchain industry that was once seen as the next big thing has now disappeared from the limelight. However, even though the hype has subsided somewhat, blockchains have gradually begun to show their strengths in commercial applications. According to Deloitte’s recent report, more than 90% of blockchain projects have been declared as ‘failures’ and talent demand has subsequently subsided.

However, blockchain’s advantages in commercialization have shown themselves, with many ‘travel blockchain’ projects appearing both at home and abroad. Baidu, Tencent and other giants have entered the blockchain industry alongside many start-up companies, ushering in an era of ‘low-profile progress.’

Comment:

Cryptocurrency has become a ubiquitous topic due to excessive market speculation, media coverage and exaggeration. However, due to the limitations and problems that cryptocurrencies face, failures are more common than successes. Some companies have taken remedial measures, while most have remained indifferent. Only blockchain projects that have survived the previous stage through focused trial-and-error and successful business models can start to grow. The market has already accepted the benefits and potential that blockchains offer, and blockchains will continue to mature as they go through successive generations of growth and progress. This evolution can happen much faster in the blockchain field than in other fields.

Figure 1. Gartner Hype Cycle for Emerging Technologies

Ⅱ.Policy Trends

1.International

August 2nd: The Securities Exchange Commission of Thailand has predicted that the first batch of five ICOs will begin the registration process, now that the digital assets law has gone into effect this month. Thawatchai Kiatkwankul, head of corporate finance at Thailand’s SEC, stated that ICOs have growth potential, and the SEC is preparing to expand its staff to merge IPO and ICO registration units to meet market demand. Projects with additional business traits can then be easily reviewed and considered for ICO fundraising.

(2)Head of CBOE Business Development Department: Plans to launch Ethereum futures trading this year are being put in motion.

August 2nd: The head of the Chicago Board Options Exchange’s (CBOE) business development department says that it plans to release Ethereum futures trading this year. CBOE CEO Chris Concannon said in an interview with Bloomberg in June that he was conducting research on Ethereum futures trading, and CNBC commentator Brian Kelly hinted the same over Twitter.

(3)The SEC has sued token issuing companies, claiming that their ICOs are frauds

August 3rd: The US Securities and Exchange commission (SEC) is strengthening auditing of cryptocurrency exchanges, including business practices and customer relations. In addition, the SEC is looking for specific information relating to transactions, financing and ICO generation expenses. Another person who is familiar with the matter said the agency is still collecting data related to the involvement of investment advisers. Jay Clayton, chairman of the SEC, said he believes the ICO market is full of fraudsters. The agency has filed lawsuits against companies that allegedly issued tokens in violation of securities laws.

2. Domestic

(1)Software Division of the Ministry of Industry and Information Technology: We are going to actively promote the healthy and orderly development of blockchain technology.

August 3rd: The Information Technology and Software Service Department of the Ministry of Industry and Information Technology organized a blockchain symposium, inviting local authorities and support organizations to exchange information on blockchain development in various regions. The meeting pointed out that the next step is for the department to continue strengthening interaction with the ministry to create a good environment for the healthy development of blockchain technology.

Ⅲ.Industry Trends

1. International

(1)McDonald’s Has Published Their MacCoins Tokens to Commemorate Their 50th Anniversary

7 September 30th: A recent statement released by McDonald’s says that the company will distribute 6.2 million MacCoins tokens in more than 50 countries throughout the world, including 14,000 restaurants in the United States. Users can obtain MacCoins through purchasing Big Macs starting August 2nd. Users will also be able to purchase Big Macs using their MacCoins. It is reported that the promotion will continue from August 3rd to the end of 2018.

(2)Nestlé Uses Blockchain Technology to Keep Track of Baby Food

August 2nd: Nestlé is using a food tracking blockchain to test whether the technology can track the fruits and vegetables being processed into Gerber’s Baby Puree.

Nestlé’s efforts are part of a broader food industry initiative that aims to reduce food recalls by using blockchain technology to track global ingredient supply chains. Kirsteas, global head of Nestlé’s supply chain, said that news of contaminate baby food products can trigger sensitive customers, and excessive food recalls may reduce consumer confidence and lead to a decline in food company sales.

(3)Wal-Mart Applies for Smart Device Management Blockchain Patent

August 3rd: Walmart has applied for a blockchain-related patent called Managing Smart Applications with Blockchain Technology. The patent describes using a blockchain server network to support an Internet of Things (IoT) ecosystem. This latest patent application was announced yesterday, detailing a system for managing smart devices using blockchain technology, including kiosks used for receiving package-delivering drones and potential smart home systems. Wal-Mart has already applied for a number of blockchain patents, including blockchain parcel delivery systems, medical record storage systems, and blockchain-based digital markets.

(4)ICE, the Parent Company of the New York Stock Exchange, is Collaborating with Microsoft and Starbucks to Build a Digital Asset “Ecosystem”

August 3rd: ICE is working with Microsoft and Starbucks to establish a new company, Bakkt, which will build a “digital asset ecosystem,” and will include Bitcoin. The platform will allow companies to buy and sell digital assets. ICE is the parent company of the New York Stock Exchange, which entered the digital asset market through digital source products earlier this year, and Bakkt will serve as ICED’s cryptocurrency exchange platform. In addition, ICE plans to launch Bitcoin futures contracts in November.

2. Domestic

July 30th: The accounts payable of Wuhan Municipal Group were transformed into upstream enterprise “blockchain receivable” using Zheshang Bank’s supply chain financial innovations, and flexibly paid upstream enterprises to help them obtain financing.

The Zheshang Bank spokesperson said that in the past, accounts receivable were concentrated at the end of the year, and upstream enterprises were caught in a situation where no funds were available due to delays in payment. However, small businesses also had difficulties in obtaining financing from financial institutions due to the associated credit risks. Now, thanks to the ‘blockchain accounts receivable’ system, upstream enterprises can access engineering funds paid for by core enterprises like large-scale state-owned corporations and central corporations, greatly easing the pressure on funds and effectively reducing costs on capital.

July 24th: According the the China Communications Network, China Mobile, China Telecom and China Unicom formally establish a trusted blockchain telecommunications application group. Guo Manxue of the China Mobile Research Institute was elected as co-chair. The aim of the organization is to build a trusted blockchain team to explore applications and solutions of blockchain technology in the fields of invoice and contract management.

IV. Cryptocurrency

(1)Ethereum Name Service (ENS) and Minds+Machines Group (MMX)

August 3rd: Ethereum Name Services announced a new partnership with Minds+Machines Group that will enable Ethereum users to attach addresses to top-level internet domain names, making them easier to remember assets, wallets, and other service related identifiers. Ethereum users will be able to register an addres in MMX’s .luxe domain (an acronym for lets u xchange easily), providing users with a more user-friendly way to access blockchain assets and services such as DAPPs and smart contracts.

Ⅴ. Voices

July 30th: The Chinese Electronics Society blockchain expert and Hangkong Information Company senior engineer Ou Ruijun believes that blockchain technology provides solutions to problems related to financial supervision of electronic invoices. By establishing a financial public blockchain and a distributed ledger platform, it’s possible to develop a public management system that is more suitable for modern electronic tax authorities, accounting firms and banks, greatly increasing the overall efficiency of the tax business. Ou Ruijin also pointed out that tax invoices make up a large portion of accounting certificates. Financial management involves multiple systems, including finance, production and operation. Blockchain will change the current approach to the integration of finances and taxes. The problem facing promoting modern electronic invoicing of double accounting can be solved through electronic invoice ledgers.

(2) Vitalik: Blockchain is a ‘global computer’ that can provide extra credibility

July 30th: Vitalik stated that blockchain is a ‘global computer’ in an interview with Tyler. He said that the ‘global computer’ has a hard drive that stores all accounts, smart contract codes and all the information stored in these smart contracts. It receives incoming instructions, which are transactions signed by many different users, and processes these incoming instructions according to a pre-prescribed set of rules. He also said that you can construct anything that can be built on a computer on a blockchain. But the most important thing is that blockchains provide credible assurance: it assures that the computer runs the you expect it to, ant that others can’t interfere through downtime, hacking, death or corporate bankruptcy.

(3)U.S. blockchain investment in the first half of 2018 exceeded total blockchain investment for 2017.

July 31st: The KPMG issued the Pulse of Fintech report, showing that U.S. blockchain investment in the first half of 2018 has already exceeded the total investment for 2017. Other key findings from the report include the constant emergence of new blockchain alliances, especially those that focus on developing blockchain-driven supply chain management solutions. KPMG pointed out that the industry is still blooming in spite of some countries banning the issuance of tokens as a financing model in a high-profile manner.

August 1st: Huobi released the Blockchain Industry Special Report (Gaming)

The report stated:

(1) The video game industry is likely to become an important tipping point for blockchains to be accepted by the masses. It is digital by nature and has many high-quality characteristics. (2) The essence of blockchain games is to return the initiative back to the users and players and reconstruct relationships between members of the industrial chain. In theory, it is not only limited to certain types of game equipment, but also has great future potential. (3) The biggest influence blockchains have on games is the determination and attribution of virtual assets and the tracing of asset history. As such, its export value lies in virtual asset transactions. (4) Due to the nature of blockchain application in ledgers, in-game assets are interoperable, and the inter-game virtual asset trading market may become a future center for traffic and wealth distribution.

(5)Founder of the U.S. Intercontinental Exchange: Bitcoin may become the world’s first global currency

August 3rd: Jeffrey Sprecher, founder of the U.S. Intercontinental Exchange (ICE), said in a dialogue with Fortune magazine that he believes that Bakkt infrastructure support, Bitcoin could become the currency of choice for global payments. Sprecher said that Bitcoin will greatly simplify the flow of global funds and may become the first global currency. According to Report Today, ICE is collaborating with Microsoft and Starbucks to establish Bakkt, which will serve as a ‘digital asset ecosystem’ through the inclusion of Bitcoin. The company will allow companies to buy and sell digital assets.